Hi, I am working gravity equation, checking the impact of multiple IV on bilateral FDI data of 50 hosts (receiving countries) from 18 home (investing countries). My panel data is pairwise country data. The unit of analysis is host countries. For example
Pairwise country (Host-home) Year id
India-Italy 2001 1
India-Italy 2002 1
India-Italy 2003 1
India-Italy 2004 1
India-Spain 2001 2
India-Spain 2002 2
India-Spain 2003 2
India-Spain 2004 2
India-Turkey 2001 3
India-Turkey 2002 3
India-Turkey 2003 3
India-Turkey 2003 3
Pakistan-Italy 2001 4
Pakistan-Italy 2002 4
Pakistan-Italy 2003 4
Pakistan-Italy 2004 4
Pakistan-Spain 2001 5
Pakistan-Spain 2002 5
Pakistan-Spain 2003 5
Pakistan-Spain 2004 5
Pakistan-Turkey 2001 6
Pakistan-Turkey 2002 6
Pakistan-Turkey 2003 6
Pakistan-Turkey 2003 6
so on.........
I want to apply the country effect, please guide how to create a country dummy.
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